Best Practices for Learning How to do Payroll in Quickbooks
It's pay time! Well, not just yet.
Before you can issue your employees their hard-earned paychecks, there are a few things that need to be done; payroll involves a complex set of processes, from setting up a federal employer identification number (EIN) to filing and paying payroll taxes. In this article, we'll take a look at QuickBooks Payroll, and learn how to do payroll in Quickbooks and what steps to follow when using it to run your company's payroll. Let's get started!
How to do Payroll in Quickbooks and Features Offer?
QuickBooks offers a full suite of payroll features that make managing staff wages and salaries easier and more efficient. Let's take a dive into these tools and what they can help you get done:
Payroll Taxes & Filing - QuickBooks makes it easy to stay on top of payroll taxes and filing deadlines. Learning how to do payroll in Quickbooks will save you a lot of time. It provides automatic calculations for federal, state, and local payroll taxes that are updated with the latest tax information. You can also e-file your 1099s at the end of the year without any hassles.
Direct Deposit - One of QuickBooks’ most popular features is its direct deposit capability. Once you decide on how to do payroll on Quickbooks you can pay your employees through ACH transfers, making it much easier for them to access their wages when they need it. Plus, you don't have to worry about the cost or safety of traditional check processing.
Payroll Reports - QuickBooks also offers comprehensive payroll reports that help you keep track of your staff's wages and salaries over time. These include detailed salary breakdowns, overtime hours, and year-end summaries that can be easily accessed anytime you need them. It’s imperative to stay ahead on how to do payroll in Quickbooks for your employees.
Employee Self-Service Portal - QuickBooks also offers an employee self-service portal, allowing staff to log in and access their own payroll records. This is a great way to make sure everyone is up-to-date with their wages and taxes, as well as any other information they may need regarding their employment.
1. Set Your EIN
We will explain step-by-step the process on how to do payroll in Quickbooks. The first thing you'll need to run payroll through QuickBooks is an Employer Identification Number (EIN). This unique code identifies your business and must be set up with the Internal Revenue Service (IRS).
Once you have it, you can easily add it to your QuickBooks account by going to 'Settings' > 'Payroll Settings' and selecting 'Edit' under 'Federal Tax'.
2. Obtain Employee Withholding Certificates From Your Staff
Next, it's time to get the employee information necessary to process payroll. Each of your staff members must complete a W-4 form that provides the information necessary for withholding payroll taxes from their paychecks. If you employ independent contractors, they'll need to fill out form W-9 instead. This information can then be added to QuickBooks, allowing you to easily generate accurate paychecks.
3. Set Your Payroll Schedule
Payroll can run on a number of different schedules, so it's important to decide which one fits your business needs. Do you want to pay your staff biweekly? Monthly? Every other Friday? Decide on the schedule that works best for you and your staff. QuickBooks Payroll also allows you to manage several different pay types. You can set your employees up on a salary, commission, hourly or other type of payment plan.
4. Calculate Gross Pay
Gross pay refers to the amount of money that an employee is paid before taxes and deductions are taken out. For salaried workers, this number is usually concrete and written on an employment contract. In the case of those who are paid on an hourly basis, you'll need to review punch clock data and time cards to determine the exact quantity of time worked and how much that yields in terms of gross pay. QuickBooks Time, an add-on to QuickBooks Payroll, can help you with this process.
5. Add Payroll Deductions
This next part requires a bit of math, but don't worry - QuickBooks Payroll will help you out here. You'll need to subtract any pre-tax deductions like pension plans and flexible savings accounts, as well as mandatory federal and state deductions like Medicare, FICA, and Social Security. You'll also need to subtract any post-tax deductions, such as health insurance and charitable contributions. Don't forget 401(k) contributions, local taxes and workers’ compensation premiums, either. While these can apply on more of a case-by-case basis, they must still be taken into account when calculating payroll.
6. Issue Net Pay To Employees
Once you've added all the deductions, what remains is your employees' net pay. This is the amount of money that they actually get to take home. Once everything is calculated, it's time to print the checks or process direct deposits through QuickBooks Payroll. You can also issue paycards, which are a type of debit card that allows your employees to access their wages without having a bank account.
File and Report Your Payroll Taxes
The final step in the payroll process is filing and reporting payroll taxes as required by the IRS.
This involves multiple responsibilities, including:
Depositing federal taxes to the IRS using electronic funds transfer (EFTPS)
Filing state tax reports according to individual pay schedules and code
Making Federal unemployment tax payments
No matter the size of your business or its payroll needs, QuickBooks Payroll can help you manage it all easily and efficiently. From setting up your EIN to filing payroll taxes, the powerful software provides a comprehensive solution that simplifies the entire payroll process. This saves time and money while ensuring compliance with federal regulations - so you can focus more on running and growing your enterprise. It’s very important for your business to learn how to do payroll in Quickbooks to maintain a competitive edge in the industry.
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